More drivel, and getting more dangerous

Max "spank Prince Andrew" Hastings reaches out to the dar al-salaam in his latest Daily Mail piece:

"It remains puzzling why David Cameron, with so much unresolved in meeting the huge challenge of remaking Britain, has chosen to take the risk of leading the way into Libya.

"His boldness in an honourable and moral cause is indisputable. Now that British forces are engaged, we can only pray for their success, and hope that the crusade to remove a wicked despot from power ends as happily as do the best fairy stories."

Elsewhere in the (recent) news: "Why we should do nothing about Colonel Gaddafi", by Max Hastings.

It begins

Is a radical a broken Conservative, one who believes in the principles of his country and whose conditioned inhibitions have snapped after too long contemplating the suborning of the Constitution?

How interesting that businessman-turned-professional-investor Karl Denninger should host a YouTube video by a subversive group that intends to mount cyberattacks on "The Machine"; a video that concludes with the soundtrack of Mario Savio's 1964 sit-down protest "put your bodies upon the gears" speech at the University of Berkeley, California.

And now that speech no longer sounds like merely the effusion of youthful testosterone, the power-ambition of spoiled adolescence; it begins to sounds reasonable, even to an older, cynical man like me, who never bought into revolution even as a student. It begins to sound like the only, desperate chance.

In that beginning are the seeds of a bigger beginning.

New Con-LibDem pact?

Why is the present Conservative government so keen on forging an alliance with the Libyan democrats?

Linguistic survival

In Hereford today, I told the tea shop owner it was the best cup of tea I'd had from a cafe in years. Delighted, he burst out, "Goo' boy!"

A seed crystal of suspicion

Yes, an SAS team was captured by Libyan farmhands how interesting. I've met one or two SAS headbangers; "They've lost the plot," was the opinion of a regular Army captain I met in the nineties.

But I'm more interested in the presence of a British spy on a remote farm in the desert 30 miles south of Benghazi, ready-placed to rendezvous with them six months before they arrived - and three months before even the unrest in Tunisia had begun.

Wisconsin News

For those of you following the union-busting moves in Ohio and Wisconsin:

Breaking news: Wisconsin has immediate openings for 250,000 serfs. Must provide own smock.

Extrapolation

Going to pick up the paper yesterday, I found a penny on the pavement and put it it our collecting-box at home. Today, 10p (two five-pence pieces). So tomorrow I expect to find a pound, and Thursday a £10 note.

After that, it'll have to be cheques.

I think I have discovered in Nature an economic model for our times.

Overentitled scribbler juggles smoking petard

Headline of an article by Max Hastings in today's Daily Mail: "How very different it might have been had someone spanked [Prince] Andrew's bottom when he was young."

Just wait until the age of the death of deference turns its attention to you, you po-faced toerag.

I have also submitted this as a comment to Mr Hastings' article; I am not hopeful that it will be allowed through by the flappers.

Bartender update

Until further notice, Harvey Wallbangers will be made with vodka and orange juice only.

'Global Credit Warfare': China Preparing for a Treasury Bond Sell-Off?

See my "Seeking Alpha" exclusive here.

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

People are a problem

The traditional European education systems are brutally exclusive. Students (except children of the rich) are not allowed to progress unless they can perform at the necessary level.

This puts pressure on students.

The US education system (and the English one for the past 30 years) is inclusive. Very little expense or effort is spared to have every student reach their 'full potential'.

This puts pressure on the teachers and the rest of the system.

The US and English systems should be producing a better 'yield' of the STEM (Science, technology, engineering and mathematics) people that we need, yet they are not.

A possible reason is above.

Could the Dow hit 4,500?

Read my exclusive on Seeking Alpha. Some of the reactions are bordering on the hysterical. How quickly we forget recent events.

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Mathematics Education

The end of a very frustrating day in academia. It's mostly off-topic (not dealing directly with the storm to come), but shines some light on why it is coming at all.

Below is an edited version of an email which I sent to a colleague in our college of education.

I am also rather distressed by your comment:

"A PhD is a terminal degree which means we are capable of self-teaching material we are unfamiliar with".

I know a great deal of mathematics, computer science, statistics, engineering and physics. I would still have much trouble teaching something like Abstract Algebra, and I have had several courses in the subject. It's not all 'just math'.

The problem, which is very close to that of our meeting today, is that mathematics is one of the most tiered subjects there is. As one of my administrative superiors told me, many subjects have an 'Intro' course, after which one can take any number of courses. This just isn't true for our discipline, until about the senior level. That is why we take the issue of prerequisites and previous material so seriously.

It is also upsetting to experts in other fields (especially education) that success at one level of mathematics is no guarantee that one will ever succeed at higher levels. A previous administrative superior couldn't understand it at all, which is one of the reasons why he publically stated that learning algebra was unnecessary 'for anyone'.

In (not so) short, this is why I take the problem of training future mathematics and science teachers so seriously. With all too many school administrators having the idea (as another administrative superior told me) that 'anyone can teach math', no wonder that we have the problems that we do.

I have been party to many discussions on mathematics education on usenet and elsewhere. Every single time, my honorable opponent criticizes how the subject is taught. They then either offer no ideas at all, or ones which have already been shown to fail elsewhere.

Ponder this: Mathematics has been taught as a discipline in its own right for about 2,500 years. The subject itself lends itself to brutal editing and revision, so that only the most robust facts and proofs survive. Given those millions of man-years of developing and teaching the subject, isn't it reasonable to suppose that we are doing some of it correctly, or at least we might know better than outsiders?

USA housing fraud summarised

Hat-tip: Karl Denninger

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

News items for UK investors

Catch up pension contributions from previous years!

From the new tax year starting 6 April 2011, you should be able to catch-up on unused pension contribution allowances from the previous 3 years, according to this business briefing - so long as you have a pension plan already in force that could have taken those contributions.

Inflation-linked savings

Birmingham Midshires are offering a 5-year fixed-term savings product that will grow by the rate of inflation (plus a bit). Please see here for details. Unfortunately it's not an ISA, so taxpayers will have to pay tax on the growth according to their tax rate and allowances - but it's an interesting proposition for non-taxpayers who just want to preserve the value of their savings. Closing date for the first issue of this plan is 10 March.

Have you given up smoking for at least a year so far?

If you have, then are you still paying your life assurance premiums as though you're a smoker? Rewriting your cover, or simply informing your insurance company (with evidence as appropriate), could save you money - see this article for details.

State Pension mix-up - check you're still on target!

There's been another computerised mess, this time with National Insurance Contributions, stretching back years, as this article explains. HMRC may not necessarily inform you if you're affected. I'd suggest you ask for an updated State Pension Forecast to be sure that you're not heading for a shortfall - click on this link to get one!

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Folding a T-shirt in two moves

Saw this at a conference yesterday, I don't think I'll be able to resist trying it:

New "Seeking Alpha" article on liquidity and market breakdown

"Seeking Alpha" has just published my latest post on QE, debt and the economy, which I can't reproduce here for commercial contractual reasons - but please click on the link below to read it there:

http://seekingalpha.com/article/251137-this-liquidity-will-soak-us-all

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Blair: a sign of repentance

Mr Blair was also forced to admit his public statements about the legality of the war contradicted those of the then Attorney General Lord Goldsmith.

He said he was making a ‘political point’ not a legal argument ‘but I accept entirely that there was an inconsistency between what he was saying and what I was saying’. - Daily Mail

The Spectator says the Tories are in thrall to Blair - ‘There are two things I’ll always try and clear my diary for,’ one minister told me, ‘watching Brian Lara bat and Tony Blair talk.’

It seems to me that the present administration's admiration is coldly, immorally professional - and deeply mistaken. For the last few years under Blair, as my wife will witness, I simply switched the sound off when he was given airtime on TV news - I couldn't bear to hear the brazen lying.

This is the man for whom current PM David Cameron got his then Opposition party to give a standing ovation in Parliament - a break with that House's tradition. Honourable exception: "Mike Penning, who had been a Tory communications chief before the 2005 election, remained defiantly seated with crossed arms." Perhaps there were others who stayed in their seats that day, and if so I'd like to know who.

But there is some evidence that Blair may not be quite as sold on himself as the rampaging Tory toffs. Although he will defend his wicket stoutly against those, quite possibly no better than he, who are trying to stump him, I begin to suspect that there is still an atom of shame and decency in him, as the end of the following extract shows:

At the end of his testimony, Mr Blair was approached by Reg Keys, whose son, Lance Corporal Tom Keys, 20, was killed by a mob in southern Iraq in June 2003. Mr Keys said: ‘I just wanted to say that you are a disgrace to your office.’

Mr Keys told the Mail: ‘He wouldn’t look me in the eye.’

He may yet, and probably as he sincerely wishes, be saved.

A stark warning from Harry Schultz

Legendary investment consultant and trader Harry Schultz has been publishing his financial newsletter since 1965. He has just retired with a sombre finale that is rapidly circulating on the Internet. Peter Brimelow at Market Watch gives us some extracts from that last letter, e.g.:

"Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest.”

I think we are now clearly beyond the time when bearish commentators can be dismissed as melodramatic alarmists. Harry Schultz is no Chicken Little blogger but has appeared in the Guinness Book of Records as the world's highest-paid investment consultant. Maybe that makes him a Chicken Big.

The 400-year timescale in the extract above chimes with the ideas of D H Fischer's "The Great Wave" and other theorists who see very long term cycles in economics. But they are largely cycles of human social behaviour, so can we still break out? Santayana warned, "Those who cannot remember the past are condemned to repeat it", so maybe knowing how it's played out before will help.

Schultz is not alone. He himself quotes a former financial officer of Ronald Reagan as saying recently: "We’re entering a global monetary conflagration. If a sell-off of U.S. bonds starts, it will be an Armageddon." In that context, Schultz does not see gold as being in bubble territory yet.

For Schultz's shorter-horizon defensive investment advice, see below as quoted by Brimelow; longer-term, we may have to seriously consider what to do in the event of a major disruption to normal living.

Here's what Schultz says for the boys still absorbedly playing the high-stakes card game in the first-class saloon of the Titanic (or the Laconia, or the Lusitania - whichever one gives you the bittersweet spine-tingle):

• 5-10% Stocks (nongolds).

• 15-20% Commodities: via futures, commodity stocks &/or physical assets.

• 50% gold stocks & bullion: 15% blue chips, 5% junior, 5% bullion via futures, 25-35% in physical bullion.

• 0% currencies (“Close out ALL fiduciary time/call deposits, money market funds & municipal bonds, pension funds…”)

• 1-5% Cash in hand. (“Stored privately.”)

• 0-5% bear stock market protection via ETFs like ProShares UltraShort Dow30

• 15-20% Government notes/bills/bonds (“In 3-6 month T-Bills/bonds only — buy these only in Swiss Francs, Australian dollars, Canadian dollars, Brazilian reals, Singapore dollars, Chinese Yuan only).”

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Jefferson, debt and democracy

"Economy and liberty, or profusion and servitude"...

Now that we are once again in "times that try men's souls" (as Tom Paine put it) many are harking back to the wisdom of Thomas Jefferson and longing for a return to the principles of the United States Constitution. This makes it all the more important to establish exactly what Jefferson said.

Let's take a frequently-quoted passage: “To preserve our independence, we must not let our rulers load us with perpetual debt. We must take our choice between economy and liberty, or profusion and servitude. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labors and in our amusements. If we can prevent the government from wasting the labor of the people under the pretense of caring for them, they will be happy.”

This is a hashed-up version of the longer and more elegant original; and even takes liberties with the language (for example, it wasn't "take our choice" but "make our election"). As so often with Jefferson quotations, there is no indication of when he said it, and to whom; and when there is, it may be wrong - this alternative mash-up says it's from "A Summary View Of The Rights Of British America" - it's not (see the 1774 text of the latter here, or here).

No: it wasn't written before the Revolution, but 40 years afterwards, with the weight of experience added to his undimmed passion for liberty, and as a result it's far more interesting.

Writing from retirement in his Monticello home, the 73-year-old is responding to historian and fellow-Virginian Samuel Kercheval, who has written a pamphlet calling for a convention to reform that State's Constitution and is seeking the support of the former 1770s representative to the Continental Congress , who in addition to later serving as President and Vice-President of the Republic has also been Governor of Virginia.

Kercheval strikes gold for posterity, if not for his immediate cause. Jefferson takes the opportunity to get down to first principles, including the "mother principle" of republicanism, which is that "governments are republican only in proportion as they embody the will of their people, and execute it." More than even before the Revolution, he is convinced of the need for "equal representation" in the Senate and House of Representatives, and observes that the machinery of democracy fails these yardsticks in both bodies. He also worries about the near-immunity of the Governor and the supreme justices, and the poor quality of juries chosen not by the people but by legal functionaries. He concludes the first part of his letter by saying that the system has worked well so far not because of the Constitution, but in spite of it, thanks to the fact that "our functionaries" have been "generally honest men"; and then proposes ways to subdivide powers and responsibilities so as to maximise the involvement of "every man who fights or pays."

Setting aside our modern views on slavery, suffrage for women and property qualifications for voting, it's an interesting precondition that the republican should be ready to pay his full share of the price of decisions which he has (or should have) an equal part in making. The people in whom he reposes his ultimate trust, are those who put their property and lives at stake for their liberty. Perhaps Jefferson sees us more clearly through his green spectacles than we see him.

But there is no equality between debtor and creditor, and Jefferson keenly perceives that the money system has the power to destroy freedom. We shall go from debt, to taxation, to oppression. After the bully-boy performance of Treasury Secretary Mr Henry Paulson in October 2008, expressing his "disappointment" with Congress' decision to reflect the will of the people and refuse assistance for several distressed banks, one of which had recently had him as its CEO, do we catch a flash from those Monticello lenses?

Now, at last, to the passage (paragraphing and emphases mine) in which the old revolutionary warns how the Republic can be lost:

"I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom.

"And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.

"If we run into such debts, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers. Our landholders, too, like theirs, retaining indeed the title and stewardship of estates called theirs, but held really in trust for the treasury, must wander, like theirs, in foreign countries, and be contented with penury, obscurity, exile, and the glory of the nation.

"This example reads to us the salutary lesson, that private fortunes are destroyed by public as well as by private extravagance. And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent for a second; that second for a third; and so on, till the bulk of the society is reduced to be mere automatons of misery, and to have no sensibilities left but for sinning and suffering. Then begins, indeed, the bellum omnium in omnia, which some philosophers observing to be so general in this world, have mistaken it for the natural, instead of the abusive state of man. And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression."

Now some will draw the conclusion that we have been brought to this pass, or close to it, by a system of public benefits; but it's more than that. Powerful private interests have weighed down the people individually with the burden of "private extravagance" and then offloaded their own heavy share of the costs of mismanagement onto the people collectively, while retaining for themselves personally the enormous fortunes they made open-eyed in their corrupt and destructive scheme.

This, over the same 30-odd years that saw the hollowing-out of the nation's economy by exposing it through international trade to competition for which the country was not adequately prepared, any more than the fish of the Atlantic were ready for the incursion of Pacific species to which the opening of the Panama Canal exposed them.

Had the people been informed by a knowledgeable and responsible news media; had they understood and been helped to accept the adjustments that would be demanded of them; had they been represented by delegates who knew their duty to their constituents; had their diplomatic and trade representatives managed the pace and scale of the economic transition; then they could have achieved economy and preserved their liberty, while allowing the less fortunate of the world to rise from unjust poverty. Instead, the aftermath of a profusion which continues to enrich a financial, politically-protected elite has, we must fear, condemned the people to servitude, or at least such inevitable obligations as will shackle their descendants for a generation or more, the attempt to escape which must involve tension and possibly worse between the nations.

Did Jefferson see this 195 years ago? It could have been yesterday.

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.